Muslim Rights Concern (MURIC) has threatened to sue a musician, Folarin Falana, popularly called Falz the Bahd Guy.
The followed his new song, titled "This is Nigeria," which the group said is anti-Islam.
MURIC urged the musician to withdraw the contentious video within seven days.
The song featured a character that dressed like a Fulani man, who suddenly abandoned his traditional guitar and beheaded a man.
"It also portrayed women in hijab as choreographers dancing to the 'shaku-shaku' (a dance associated with a drug-related song).
Director, MURIC, Ishaq Akintola yesterday denounced the dance video saying: "It is thoughtless, insensitive and highly provocative. It is a hate video. It is Islam phobia nulli secundus.
"This video has the potential of causing religious crisis of unprecedented dimension. We therefore demand its withdrawal and an apology to Nigerian Muslims within seven days."
He warned that if the musician or the authors and their agents fail to do so, MURIC would institute legal action against them.
Akintola said the video manifests ethnic bias against Fulani, while ignoring the criminal activities of ethnic militia in the Middle Belt who have also massacred Fulani and rustled their cattle in thousands.
"This video has denigrated Islam, demonised Nigerian Muslims and subjected them to public opprobrium," he said.
Akintola added: "MURIC rejects Falz' explanation that the girls in hijab in his 'Shaku Shaku' dance symbolised the Chibok girls.
According to him: "Nothing in the video indicated that they represent the Chibok girls, especially as none of the Chibok girls had been seen dancing like a drunkard."
He said the Chibok girls are always in pensive mood, and have no cause to be dancing, because they are not happy.